A NATIONAL newspaper columnist blamed the euro for the European economic crisis.
He implied that the difference in situations in Germany, where the least economic downturn is being felt, and in Spain, where the greatest effect is being felt, is due to their currencies being the euro.
What was never raised was the basis of the two economies.
Germany is heavily weighted towards manufacturing while Spain has a similar level of activity in tourism. It has been relatively easy for German manufacturers to adapt to market conditions with the help of their government’s policies.
Over the past year, Spain’s large tourism income has dropped by about 5.6 per cent. A key element in that industry has been the construction of different types of holiday and retirement accommodation.
With no evidence that people will continue to travel or purchase accommodation the construction industry is suffering a major decline.
In the good times, the euro gave ease of travel and reduced the cost of inter-country trade that brought about a ten per cent increase in economic activity. A return to pre-euro status would exacerbate the economic downturn that countries are dealing with.
Bill Morehead, Darlington.
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